4 Ways Adding a Comfort Consultant Could Double your Sales

We all know that profit is the engine that drives every heating and air conditioning business. Profits come from sales. Sales and profitability increase when businesses make the transition from a service company selling equipment to a retail company selling comfort. This profitable journey can start the day the first Comfort Consultant is hired.

1. Sales and revenue accelerate
According to multiple industry studies, the average hvac contracting business generates less than $1 million dollars in annual sales. A properly trained comfort consultant can boost sales an additional $400,000 to $800,000 per year.

When an hvac company first starts in business all sales are made by either the owner or service technicians. Unfortunately, most of our technicians are under the crack of the dispatcher’s “whip” and find themselves hurrying to get to the next job, not leaving any time to discuss improved comfort. In companies with less than $1 million in annual sales, the owner is usually wearing multiple hats and spends much of the day putting out fires.

If we run the numbers using an average sale of $5912, it takes about 170 sold jobs to hit $1 million dollars in annual sales. Considering the typical close rate of just 25%, these busy owners need to run 680 appointments to hit the $1 million dollar mark. That’s 13-14 appointments every week, or about 3 per day, every working day of the year.

When a sale is made it’s likely to be a lower-price easier-to-install solution. The reality is, minimum solution selling not only reduces sales it also robs profits. Minimum solutions are responsible for most installation complaints and non-billable warranty problems. It’s no secret, when warranty problems and callbacks go down, profits go up.

When a dedicated consultant starts doing the selling, the focus usually shifts from rushing to the next problem to taking the time needed to best solve the current customer’s problems. Smart consultants soon realize the most important time of the day is spent discovering and addressing each buyer’s individual wants, concerns and desires. As the consultant’s skills grow, the company’s average replacement system selling price and profit margin could easily double what they were before.

If the company from the previous example hired a consultant who did nothing but increase the average sale by 25% to $7,390 and doubled the close rate from 25% to 50%, the dedicated comfort consultant would only need to close 135 sales and run 270 appointments to hit the $1 million dollar mark. That’s just 5 appointments each week, or about 1 every day.

Keeping everything else the same, revenue soars to almost $2 million dollars if our consultant can run two appointments every day. [2 appointments X 250 days = 500 appointments X 50% close rate = 250 sales X $7,390 average sale = $1,847,500]. This dedicated comfort consultant could generate almost $2 million dollars in revenue, but would need to run 180 fewer [680-500 = 180] appointments than the owner needed to hit $1 just million dollars.

2. Profits multiply

Net profit, the real goal of business, expands when sales increase faster than overhead. Overhead items like debt service, office equipment leases and support team’s salaries must be paid whether sales are made or not. Most of the overhead the business already has in place is sufficient to support the new sales added by the new comfort consultant.

A reduction in overhead has a turbocharging effect on net profits. If overhead goes down one dollar and other items remain constant, net profit skyrockets a dollar. In companies where the owner tries to sell and manage simultaneously, overhead can be up to 10% higher than necessary. When a full-time comfort consultant comes on board many owners finally have the time to properly manage all the other aspects of their businesses.

3. Management maximizes money
Choosing the right sales process is the most important step in managing sales and maximizing the profits that follow. The sales process the business selects depends on the type of customers it prefers to do business with. An emotionally based selling process is required to increase the average sale by consistently selling premium products to discerning buyers. Any process that uses manipulation or doesn’t focus directly on hvac should be avoided. The process must make sense to the consultant, be comfortable for the buyer, and be easy for the owner to manage.

The training piece of the process should provide the new consultant with the skills, tools and confidence to excel in today’s highly competitive price-focused market. The greatest results are shown to come from programs that incorporate role-playing, coaching and evaluating to help the new consultant effectively deal with all types of real-world sales situations.

Every sale requires a lead. The lack of good leads is the number one reason new consultants fail. Just by showing up on time and talking with people about comfort even an inexperienced consultant will convert 25% of the conversations into some sort of sale. Many of the best leads come from service technicians. The typical close rate on these leads can run anywhere from 65-85%.

Each tech knows their customers and the types of problems they’ve been experiencing. The weekly service meeting is an ideal time for the owners and managers to talk to technicians about discovering good sales leads then implementing a process to effectively transfer hot leads to the new comfort consultant.

One of the owner/manger’s most pressing jobs is helping the new consultant’s sales skills to continuously improve. This vital, yet often overlooked, step in the process is a key to the new consultant’s growth and effectiveness and the company’s growth and profitability.

Improvement requires measurement. If there is no measurable change, there is no improvement. The four items the consultant must document and the owner/manger must measure are:
• Leads source
• Selling price
• Closing ratio
• Profit margin

These items, along with all notes taken on every sales call the prior week, provide the basic tools the owner/manager needs to be an effective sales coach.

Time must be set aside at least once a week for the coach and consultant to celebrate wins, review goals and discuss opportunities for improvement.

4. Financial Freedom

If you’ve been in business for a while, look back on the past five years and ask yourself  what you’d like to change in the next five years. Where would you like to be five years from now? More stable financially? Free to spend more time with the family? Ready to sell or transition the business to a family member? Will you be wearing many hats in order to make a living, or managing a company and a sales process that leads directly to financial independence? The wonderful thing about being in business in America is that every firm, no matter how small, has the potential of producing unlimited profits.

Hiring, training and supporting your first comfort consultant can be the most important step you take to maximize profits and turn your goal of financial freedom into reality.

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